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This paper reviews recent findings on wood–water interaction and puts them into context of established knowledge in the field. Several new findings challenge prevalent theories and are critically discussed in an attempt to advance current knowledge and highlight gaps. The focus of this review is put on water in the broadest concept of wood products, that is, the living tree is not considered. Moreover, the review covers the basic wood–water relation, states and transitions. Secondary effects such as the ability of water to alter physical properties of wood are only discussed in cases where there is an influence on state and/or transition.